Strategic Control and Reward Systems Quiz
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Questions and Answers

What are strategic control and reward systems?

  • An external competition measure
  • Internal governance mechanisms to align the incentives of principals to agents (correct)
  • A style of leadership
  • A method for increasing employee satisfaction
  • What is organizational culture?

    A strong motivator and control system with norms that influence overall productivity.

    What are input controls?

    Mechanisms that define and direct employee behavior through rules and procedures.

    What are types of input controls?

    <p>Budgets, standard operating procedures, and policies.</p> Signup and view all the answers

    What do output controls seek to do?

    <p>Guide employee behavior by defining expected results.</p> Signup and view all the answers

    What are traits of output controls?

    <p>They depend on the relationship between effort and performance and are more effective in single business focus.</p> Signup and view all the answers

    Study Notes

    Strategic Control and Reward Systems

    • Essential component in achieving competitive advantage through organizational design.
    • Functions as an internal governance mechanism aligning the interests of principals (owners) and agents (employees).

    Organizational Culture

    • Acts as a powerful motivator and control system within an organization.
    • Strong norms are crucial, influencing overall group productivity through peer control.
    • Values and norms offer frameworks for managing unpredictable situations.

    Input Controls

    • Designed as mechanisms within the strategic control and reward system.
    • Aim to define and guide employee behavior using explicit, codified rules and standard operating procedures.
    • Considered necessary before engaging in value-creating activities to ensure alignment and predictability.

    Types of Input Controls

    • Establish pathways to achieve goals and outcomes consistently.
    • Include budgeting processes, standard operating procedures, and organizational policies to streamline operations.

    Output Controls

    • Focus on guiding employee behavior by outlining expected results without specifying how to achieve them.
    • Encourage flexibility and creativity in problem-solving, allowing for varied approaches to meet objectives.

    Traits of Output Controls

    • More effective in contexts where performance is closely linked to effort put in by employees.
    • Best utilized in organizations concentrating on a single business model or those employing unrelated diversification, where collaboration is minimized.
    • Foster an environment that emphasizes work output, potentially diminishing intrinsic motivation among employees.

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    Description

    Test your understanding of strategic control and reward systems within organizations. This quiz covers concepts such as organizational culture, input controls, and the different mechanisms that ensure alignment and productivity. Dive in to see how these elements contribute to achieving competitive advantage.

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